SoftBank fully cashed out its Nvidia stake for an even bigger AI bet

By Jules Rimmer

Japanese investment group sold $5.8 billion Nvidia stock in October

SoftBank

SoftBank Group , owned by the richest man in Japan, Masayoshi Son, revealed on Tuesday it had sold its entire stake in Nvidia last month - for an even bigger bet on artificial intelligence.

SoftBank disclosed it sold out of its 32.1 million share Nvidia (NVDA) stake for $5.8 billion as its fiscal second-quarter earnings doubled in the second quarter to 2.5 trillion yen (approximately $16.2 billion), way ahead of analyst consensus.

It also sold down part of its stake in T-Mobile US (TMUS)

Asked at the end of a call for SoftBank's motivation in selling Nvidia, chief financial officer Yoshimitsu Goto implied that the money was needed, and better utilized, by funding further investment in ChatGPT maker OpenAI.

"We don't have any specific meaning in October or it's nothing to do with Nvidia itself," he said.

Goto was also asked about whether AI stocks were in a bubble. "I don't think I can answer whether this is a bubble or not" but he followed up by declaring "the risk is bigger if you don't invest."

Shares in SoftBank (JP:9984), listed on the Tokyo stock exchange, with depositary receipts (SFTBY) also traded in the U.S., have trebled this year as its AI bets have paid off.

A major locomotive of profit growth was the revaluation of its holding in OpenAI - SoftBank values the entire company at $260 billion - as well as stakes in TSMC (TSM), Arm Holdings (ARM) and Oracle (ORCL).

During the earnings call, CFO Goto enthused about the progress made by OpenAI which now has 870 million downloads of its ChatGPT app and 800 million weekly users.

Goto was delighted on the progress made by Softbank's investment in Open AI.

In December, SoftBank is already committed to investing another $22 billion in the next round of funding for OpenAI. Goto was also anxious to emphasize the progress made by PayPay, Japan's leading QR code payment app that plans to float publicly at some stage, as well as Arm Holdings that he thinks "is performing pretty good."

Physical AI is also a focus of SoftBank and Goto was satisfied with the acquisition of ABB Robotics, bought for $5.4 billion, as well as his investment in Wayve, an autonomous driving technology company.

SoftBank shares closed the session in Tokyo up 2% at 22,695 yen. Of the analysts submitting recommendations and estimates to FactSet, only two have a sell rating while the average target price is some 20% above current levels around 26,000 yen.

-Jules Rimmer

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11-11-25 0615ET